Exam CISA topic 1 question 1313 discussion

This is A. Detection risk - risk that the audit procedures will not detect a material misstatement. that is the risk that something will get missed by the auditor. In this case. What would influence most would be inherit risk.

Answer A While the effectiveness of the sampling methodology chosen can influence detection risk to some extent, detection risk is more directly influenced by factors such as the nature and extent of audit procedures, the competence of the audit team, and the quality of the audit evidence obtained. In contrast, inherent risk (option A) directly relates to the characteristics of the audited entity and its environment, including the susceptibility to errors and irregularities before considering the effectiveness of internal controls. Therefore, inherent risk has a more direct influence on the selection of a sampling methodology as it determines the baseline level of risk present in the population being sampled.

D. Detection Risk Detection risk is the risk that the auditor’s procedures will not detect a misstatement that exists in an assertion that could be material, either individually or when aggregated with other misstatements. Auditors adjust their sampling methodology to mitigate this risk.

D is correct. Detection risk is the possibility that an error goes unnoticed. Sampling must be adapted to avoid missing errors.

A. Inherent is the right answer. Inherent risk is the risk that exists before any controls are implemented.